HR Tech: what is coming in 2023

HR Tech: what is coming in 2023

Over the past years, investments in the HR tech market have been going crazy, and the number of startups in this area has snowballed. More and more companies are integrating into the digital environment for effective personnel management, optimization of human resources, and simply maintaining their competitiveness in the global market. Modernizing your team with technology is a sure step toward the future.

New problems have brought many new solutions to the market. The COVID-19 pandemic has accelerated investment in technologies. Remote and hybrid work required a redesign of the workplace, effective tracking of team productivity and training, and establishing interaction between company departments, accounting, payment, and other organizational issues in a reliable and functional environment. Virtual recruiting has become a key trend in workforce expansion.

What to expect in 2023? Let's take a look.

The HR Tech Market is calming down

Some trends that started during the pandemic will continue developing in the post-Covid period in 2023. However, changes in the world with the complete abolition of quarantine and related restrictions will bring uncertainties.

According to research, in a post-pandemic recessionary economy, companies seek to cut costs and, specifically, reduce their staff. Thus, for example, startups that optimize recruiting and hire many employees to lose their value.

Moreover, as in the labor force, multitasking and scalability are increasingly valued in related technologies. Investing in solutions focusing on more than one task is already costly and inefficient. The primary trend is to combine multiple HR functions to interact with employees in one environment. It takes time to develop such a solution. And the existing ones are losing their popularity and, accordingly, their shares.

According to a recent study by Gartner, 60% of large and medium-sized companies investing in cloud-based HCM systems experience a gap in their current functions. Due to this tendency, the prices for HCM systems can be significantly reduced. The market is full of alternative tools to choose from.

Some new categories size the market

Instead of implementing innovations just for the sake of their popularity, it's still essential for HR leaders to consider how a particular technology will affect their business. Specific attention should be paid to whether the HR technology will complement the existing strategies and whether it will be well-integrated.

For example, HR managers may focus on data security, employee onboarding, and well-being. Based on this identified demand, some categories will be popular in 2023.

Lifecycle employee listening systems (Qualtrics, Visier, Perceptyx, BetterUp, Glint, Workday Peakon, Microsoft Viva Insights): They collect data from multiple sources about employee impressions, desires and attitudes, productivity, and engagement level.

Talent intelligence platforms (Eightfold, LinkedIn Talent Solutions, Gloat, Beamery, Phenom, SeekOut, iCIMS): These solutions analyze and personalize talent data to make the right HR decisions to meet specific recruiting needs.

EXP solutions (HulerHub, Lattice, Kazoo, Microsoft Viva, ServiceNow, Workvivo, Culture Amp): Include platforms that help to create a cohesive work environment and a coherent company culture by increasing engagement, improving business alignment and team collaboration, optimizing the resources used, etc.

Cyber security and safety tools (Microsoft Authenticator, LastPass, HR Chatbots, Authy, SecurID, Thales): They make the workplace safe and protect the large flow of data from potential threats.

Employee wellness platforms (Lifeworks, Woliba, League, Awardco, Optimity, mEquilibrium): Additional tools that focus on employee psychological safety and maintaining their satisfaction through UI optimization, health monitoring, rewards and incentives, work schedule optimization, etc.

Vendors offering a set of these features in their solution are a big deal!

Immersive technologies and Web 3.0: not yet

Since, in many companies, some employees work remotely, or in hybrid conditions, it takes work to establish communication and effective team interaction. The future use of augmented (AR) and virtual reality (VR) can help minimize the gap between office workers and at-home ones.

Virtual recruiting fairs can also be demanding areas using metaverse technologies. Candidates can get a real-life demonstration of the company they can work for and get to know the workplace. Virtual company tours will help them spread brand awareness and attract more talented employees.

Training and professional development in virtual reality is one more competitive advantage. Simulation of possible situations and immersion in real-life scenarios will help employees acquire unique practical skills.

Web 3.0 technologies have real prospects but are still unstable and still developing. Their implementation may bring more challenges and costs than benefits at this stage. First, VR or AR headsets can cost up to $1,000 per employee. There is also a need for technical specialists for regular maintenance and configuration of devices. Mastering these technologies requires special training and time.

Another issue is cyber security. HR leaders must navigate the metaverse to determine how to protect data and employees from cyber threats. The internal policy must be clearly formed and adapted to the virtual world.

The metaverse is an exciting new technology that companies and HR departments should consider. However, its implementation should be held off for now.

Things to consider if you are the HR Tech buyer

Now let's switch directly to those who create demand and implement personnel management technologies.

There is a vast number of HR technologies available now, but choosing the right one requires much investment. Do you think about money? No, it's time!

There are two driving forces of quality and conscious choice: needs analysis and market analysis.

First, you must analyze the existing software and determine what functions need to be added. In addition, you should decide what problems you want to solve and what needs your employees have. Of course, everyone wants something better. But it is essential to understand what 'better’ means for you.

There are several types of HR Tech tools:

•           A central HRMS or HRIS for HR managers to view all employee-related parameters starting from onboarding to employment, in one place;

•           Recruiting tools to optimize the recruitment channel and talent selection;

•           Reward tools for salary determination, plan incentives, cash management, and budget compliance;

•           Performance trackers to track employee progress and set goals for the next period;

•           Cultural tools that help keep employees connected and engaged;

•           Educational tools for familiarizing employees with new technologies and for professional development;

Once you've decided what you need, you know what to look for in the market. Study the existing market in all detail so that your choice is flexible. Don't chase the most prominent players. Consider how to combine the components into a single system and strengthen their interaction, as well as how you plan to develop your technologies. The background always has a massive impact on the final result.

For this purpose, it is helpful to have an HR Tech specialist on your team who follows trends and current research has close cooperation with vendors, and navigates this space.

Transformation above the automation

Some companies tend to face the fact that they do not succeed in their niche, no matter how many technologies they implement. The investment rate partially causes a setback. It's only sometimes going to be about money. Effective use of technological tools, particularly in HR, requires time, people, and quality management at all stages. Successful companies work for the future, building long-term plans clearly defining where and when to implement innovation.

In addition, it is essential to understand that every HR technology platform gives you one of the value advantages.

Automation of time-consuming or junk tasks.

HR Tech automation can save time on routine tasks, improve company security and reduce the likelihood of human error. With the help of such solutions, you can make document flow and administration easier, optimize the payroll system, hire employees process, manage the current workforce (qualification training, referral programs, transition between departments), etc.

Changes in the way the HR department operates

The HR operating model is as central to any HR transformation strategy as any business component. It organizes sub-structures, capabilities, and related processes for the greatest synergy effect.

A relevant way of workplace transformation is the transition to a hybrid work organization. Technological solutions at this stage play a significant role. They help to work effectively, maintain productivity, organize employee interaction and communication, and create a comfortable and healthy virtual environment. High personnel productivity and interest in work mean the easier achievement of goals, expansion of the business, and, accordingly, capturing the market and occupying leading positions.

Thus, it would be best to focus on HR technologies that transform your business to improve internal mobility and flexibility and obtain a competitive advantage in 2023. In-time transformations always mean compliance with modern trends.

2023 promises many more changes and changes in priorities. But let's consider everything step by step, and it is only the start of the journey.